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THE populists are now ruling Greece. The leftist populist party Syriza, led by the new Prime Minister, Alexis Tsipras, has forged a coalition with the smaller right-wing, but equally populist, Independent Greeks.
READ: Greece on a knife-edge
This combination has been greeted with whoops of joy from all populist parties in Europe, from France’s right-wing Front National to the Dutch Socialistische Partij.
Which shows that the concepts of left and right have largely lost their significance in modern politics. The modern divide is more between the exciting populists who promise their voters the world, and the dreary realists who have the annoying habit of insisting on unpleasant realism.
Indeed, Syriza’s promises have fallen just short of promising heaven on earth. Tsipras vowed to increase the minimum wage, turn back pension cuts, lower taxes and reinstate all laid-off state officials in their former positions.
The new Minister of Finance, Yanis Varoufakis (who defines himself as a Marxist), calls the conditions of the European Central Bank (ECB) and the International Monetary Fund (IMF) for loans to Greece “financial waterboarding”. He wants to distribute free meal tickets to the poor and give free electricity to those who cannot pay their energy bills.
Tsipras has said he will renegotiate the international aid package (which he considers a “humiliation”), and unilaterally cut the amount to be paid back by half.
There is just one tiny problem. Neither Tsipras nor Varoufakis has shown any real awareness of where the money for all these fantastic things will come from.
Germany will foot the bill - or will it?
Correction: it will come from Germany. In an interview with the French newspaper La Tribune, Varoufakis stated categorically: “Whatever the Germans say, in the end they will always pay.”
This was a direct answer to the German Minister of Finance, Wolfgang Schäuble, who told the news magazine Der Spiegel: “Nobody is forcing Greece to do anything, but the obligations stand. Nobody who didn’t want it, was given an aid package, and when Mister Tsipras says he doesn’t want it, then that is fine, then he will have to find other ways to deal with Greece’s problems.”
Schäuble’s words contained a sting. The fact is that the new Greek government is in a very weak bargaining position.
Before the onset of the European summer, Greece will have to repay about €9bn worth of state debt. And before the end of the year, another €11bn will have to follow.
These are debts no new government can renege on without all international economic ties between Greece and the rest of the world being cut off. In order to prevent a total collapse, the ECB and IMF decided on a loan worth several billions in 2012, provided that the Athens government abandoned its free-spending spree and practised strict frugality.
A troika, comprising the ECB, the IMF and the European Commission (the European Union’s “cabinet”), regularly visits the country to investigate whether Greece is keeping to its side of the bargain. Indeed, another €8bn will flow into Greek state coffers this year – provided the troika approves. And if Tsipras and Varoufakis keep their election promises, Greece will not receive a cent - about that, German Chancellor Angela Merkel has been very clear.
Tsipras is already hitting back in other ways. For instance, the EU wants to intensify economic sanctions against Russia because of that country’s role in the renewed fighting in the eastern Ukraine, but Tsipras has indicated that he will veto it. And, as the EU’s foreign policy is conducted on the basis of consensus, he can be a real stumbling block.
Of course, it is still early days and both sides are guilty of posturing. This is the nature of politics. It is a question of who will blink first.
On the one hand, Europe is loath to see Greece take its own course. If the worst happens and Greece departs from the eurozone or even the EU as such, it may usher in disintegration of the whole structure.
On the other, numerous financial, economic and political walls have been erected around Greece to prevent the EU from falling apart. And, at the same time, there is simply no way whatsoever the new Greek government can do without the huge international aid package.
A realistic scenario could be that Greece formally starts renegotiating the terms of the aid package, and that it is given a symbolic concession or two. With this, Tsipras may then go to his voters, throw up a huge smokescreen and claim victory.
He might just get away with it.
Nevertheless, Tsipras is now in the same uncomfortable position the ANC found itself in when it took over the government in 1994.
Being in opposition is actually very pleasant, because you can criticise and shout all you like without bearing the consequences. In government, everything changes.
Hopefully Tsipras, an intelligent man, will learn this lesson fast. In South Africa, the ANC appears to have unlearnt the lesson after 1999.
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
READ: Greece on a knife-edge
This combination has been greeted with whoops of joy from all populist parties in Europe, from France’s right-wing Front National to the Dutch Socialistische Partij.
Which shows that the concepts of left and right have largely lost their significance in modern politics. The modern divide is more between the exciting populists who promise their voters the world, and the dreary realists who have the annoying habit of insisting on unpleasant realism.
Indeed, Syriza’s promises have fallen just short of promising heaven on earth. Tsipras vowed to increase the minimum wage, turn back pension cuts, lower taxes and reinstate all laid-off state officials in their former positions.
The new Minister of Finance, Yanis Varoufakis (who defines himself as a Marxist), calls the conditions of the European Central Bank (ECB) and the International Monetary Fund (IMF) for loans to Greece “financial waterboarding”. He wants to distribute free meal tickets to the poor and give free electricity to those who cannot pay their energy bills.
Tsipras has said he will renegotiate the international aid package (which he considers a “humiliation”), and unilaterally cut the amount to be paid back by half.
There is just one tiny problem. Neither Tsipras nor Varoufakis has shown any real awareness of where the money for all these fantastic things will come from.
Germany will foot the bill - or will it?
Correction: it will come from Germany. In an interview with the French newspaper La Tribune, Varoufakis stated categorically: “Whatever the Germans say, in the end they will always pay.”
This was a direct answer to the German Minister of Finance, Wolfgang Schäuble, who told the news magazine Der Spiegel: “Nobody is forcing Greece to do anything, but the obligations stand. Nobody who didn’t want it, was given an aid package, and when Mister Tsipras says he doesn’t want it, then that is fine, then he will have to find other ways to deal with Greece’s problems.”
Schäuble’s words contained a sting. The fact is that the new Greek government is in a very weak bargaining position.
Before the onset of the European summer, Greece will have to repay about €9bn worth of state debt. And before the end of the year, another €11bn will have to follow.
These are debts no new government can renege on without all international economic ties between Greece and the rest of the world being cut off. In order to prevent a total collapse, the ECB and IMF decided on a loan worth several billions in 2012, provided that the Athens government abandoned its free-spending spree and practised strict frugality.
A troika, comprising the ECB, the IMF and the European Commission (the European Union’s “cabinet”), regularly visits the country to investigate whether Greece is keeping to its side of the bargain. Indeed, another €8bn will flow into Greek state coffers this year – provided the troika approves. And if Tsipras and Varoufakis keep their election promises, Greece will not receive a cent - about that, German Chancellor Angela Merkel has been very clear.
Tsipras is already hitting back in other ways. For instance, the EU wants to intensify economic sanctions against Russia because of that country’s role in the renewed fighting in the eastern Ukraine, but Tsipras has indicated that he will veto it. And, as the EU’s foreign policy is conducted on the basis of consensus, he can be a real stumbling block.
Of course, it is still early days and both sides are guilty of posturing. This is the nature of politics. It is a question of who will blink first.
On the one hand, Europe is loath to see Greece take its own course. If the worst happens and Greece departs from the eurozone or even the EU as such, it may usher in disintegration of the whole structure.
On the other, numerous financial, economic and political walls have been erected around Greece to prevent the EU from falling apart. And, at the same time, there is simply no way whatsoever the new Greek government can do without the huge international aid package.
A realistic scenario could be that Greece formally starts renegotiating the terms of the aid package, and that it is given a symbolic concession or two. With this, Tsipras may then go to his voters, throw up a huge smokescreen and claim victory.
He might just get away with it.
Nevertheless, Tsipras is now in the same uncomfortable position the ANC found itself in when it took over the government in 1994.
Being in opposition is actually very pleasant, because you can criticise and shout all you like without bearing the consequences. In government, everything changes.
Hopefully Tsipras, an intelligent man, will learn this lesson fast. In South Africa, the ANC appears to have unlearnt the lesson after 1999.
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
